Damage Control for a Horse with Two Broken Legs

by Andrew Hoffman
Miles Franklin

Do you want to know why the Cartel was so hell bent on capping gold at $1,340/oz on Monday, in perhaps the most PM-bullish news environment imaginable? You know, when Deutsche Bank was plummeting 9%; the Algiers oil meeting was on the verge of failing; and the stock market was plunging – albeit, by exactly the PPT’s “ultimate limit down” of 1%; ahead of the potentially status quo changing debate that evening? Let alone yesterday, when DB plunged anew, and the Algiers meeting did in fact fail?

Simple, because yesterday was COMEX options expiration day, and $1,338 represented gold’s 50-day moving average. Which is probably why “someone,” for the third time in the past week, dumped three massive “market sell” orders around the COMEX opening – the first, for 7,000 contracts,” in the thinly-traded “pre-market” at 6:45 am EST; the second, for 6,000 contracts, ten minutes before the COMEX open, at 8:10 AM EST; and the third, for 5,000 contracts, at 8:45 AM. All in all, 18,000 contracts, representing 1.8 million ounces of “paper gold,” worth $2.4 billion. In other words, par from the course, amidst a “summer of hell” for PM investors – during which, as the political, economic, and monetary world crumbled around it, the Cartel has maniacally held Precious Metals around their initial post-Brexit highs. Quite obviously, guarding the key technical levels of $1,375 oz (gold’s five-year downtrend line) and $20.40/oz (silver’s 50-month moving average) – knowing full-well that “buy stops” above those levels will likely catalyze the next, massive surge in real money buying we all know is coming. And given how these “terrifying trends” are worsening, I have never felt stronger that this Fall will be the “season of hell” for the powers that be, at the expense of those who have done the right thing by preparing for it.

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